UPDATE: Chiesi Pleads Guilty, Won’t Cooperate Against Rajaratnam

Jan 19 2011 | 9:09pm ET

A key figure in the Galleon Group insider-trading case has pleaded guilty, netting prosecutors their 15th guilty plea in the massive investigation.

Danielle Chiesi, until last month the co-defendant of Galleon founder Raj Rajaratnam, said she was “deeply ashamed” of passing on confidential tips and trading on them at hedge fund New Castle Partners. Chiesi pleaded guilty to three counts of securities fraud as part of a plea deal; she faces almost four years in prison when she is sentenced in May.

Chiesi’s plea deal does not include an agreement to cooperate with prosecutors and she will not testify against Rajaratnam, whose trial begins next month.

“I apologize to the court and I take full responsibility,” a tearful Chiesi told U.S. District Judge Richard Holwell. She admitted leaking non-public information about Advanced Micro Devices, IBM Corp. and Sun Microsystems to her boss at New Castle, Mark Kurland, and others. Kurland has also pleaded guilty in the case and was sentenced to more than two years in prison.

“By crossing the line on those occasions, I ruined a 20-year career in my field and brought disrepute to what was an honorable profession,” Chiesi said.

Chiesi’s plea deal calls for a sentence of between 37 months and 46 months. She will also have to forfeit assets, but her lawyer said it won’t be anywhere near the $4 million in illicit profits she is accused of earning at New Castle.

“She did not trade for her own account,” Alan Kaufman told Reuters.


In Depth

Q&A: Executive Recruiter Talks Hedge Fund Closures, Hiring Trends

Dec 19 2014 | 6:58am ET

This year, hedge funds have been closing at a rate not seen since the financial...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.